Full disclosure

American regulators nixed a sale of the city’s exchange to a group led by China-based investors. Officials are worried about murky ownership, an issue that has also bedeviled conglomerate HNA. The question is reasonable though, and raises the bar for Chinese firms.

Context News

The U.S. Securities and Exchange Commission on Feb. 15 blocked the proposed sale of the Chicago Stock Exchange to a group of investors led by Chongqing Casin Enterprise Group.

The deal, proposed in February 2016 for around $25 million, had previously received a green light from the Committee on Foreign Investment in the United States – a body that screens acquisitions for national-security threats – as well as an initial approval from SEC staff.

In a report, the commission cited concerns about whether undisclosed relationships between some of the China-based buyers might violate ownership and voting limitations. It also noted unresolved questions about the regulator’s ability to ensure sufficient oversight.

Several U.S. lawmakers had previously urged the SEC to reject the deal, citing the consortium’s China-based owners.